Investigator to examine sale of Bath city property

BATH — After being besieged by questions from residents, the City Council on Wednesday decided to appoint an independent investigator to look into the controversial sale of city-owned property in May.

The council also unanimously approved a new policy, drafted by the Economic Development Committee, that governs the sale of city-owned property.

Councilor David Sinclair, who has called for the panel to answer questions from critics of the sale of the Mid Coast Center for Higher Education, proposed the investigator interview anyone involved with the sale – including councilors, the city manager and solicitor, and the real estate broker – and collect documents related to the sale.

The investigator would then issue a public report, Sinclair said, “in the hopes of restoring some of the trust that has clearly been either damaged or lost in the course of these proceedings.”

“It is unfortunate that we find ourselves in this situation, and there are many circumstances that led us here,” Councilor Steve Brackett said. “But regardless, we’re here, and I would support David’s idea.”

The rest of the council also agreed, and the motion passed unanimously. Sinclair and City Council Chairman Bernard Wyman will further discuss who to approach for the investigation.

The council on April 17 unanimously approved the sale of the former hospital on Park Street. It was owned by the city for about a decade before being sold to Robert Smith of Phippsburg for nearly $800,000, despite an assessed value of $6.5 million, according to the city’s online database. The vote drew no public comment that night.

More recently, Larry Scott of Washington Street and Michael Wischkaemper of York Street are among residents who have criticized the lack of a response from most councilors to questions they later submitted about the sale.

“If we knew what happened, perhaps there would not be questions of scandal, perhaps there would not be discussions of wrongdoing,” Wischkaemper said last month. “… I don’t think that Mr. Scott or I have ever said that the building shouldn’t have been sold. We think it probably should have been sold. We simply agree that due diligence wasn’t done to set a price, and to sell it in an appropriate way.”

Sinclair said the council’s reaction, so far, has been insufficient. “It is important that we change our method,” he said, “that we do something more to address the legitimate questions that have been put forward.”

Scott told the council he thought it was moving in the right direction, “and I want to applaud that in every way possible.”

He asked to be given the e-mail address of the investigator the council chooses, because he has more than 1,000 e-mails and 300 or 400 pages of information he wants to submit.

“I think that if we’re going to do this investigation, we’re actually going to take the time and do it correctly, they should have all of the data, not just one side or the other,” Scott said.

Just before Sinclair’s recommendation, Rabyrne Hutton of High Street announced his resignation from the Bath Development Committee. He has been the only citizen member of the panel, which is otherwise made up entirely of city councilors.

“Maybe I misunderstood what the committee is for, but with the large number of council and low number of the public, meaning me, what is the reason for this committee?,” he asked. “… With the council’s lack of openness, and refusal to address questions presented, I feel I can no longer remain on the committee and support the council in the future.”

The Mid Coast Center was listed with a real estate agent, and the city received a full-value offer from Smith six days later, City Manager Bill Giroux has said. Part of the offer was that the property would not be advertised until the City Council had an opportunity, soon afterward, to consider the matter, the manager said.

Paul Mateosian, Bath’s assessor and assistant city manager, has said the assessed value of tax-exempt properties is irrelevant. He said the value listed in the database for the early 20th century property is a “cost-approach number,” based on what it would cost to build a hospital that size, minus depreciation, and is not intended to reflect the existing building’s market value.

The former hospital has been reutilized as a rental property, and its expenses have exceeded income during much of the time the city has owned it, Mateosian said. He explained that a property like the Mid Coast Center, with an unstable tenant situation, would be capitalized at a higher rate than a parcel with a stronger income stream, causing the value to be reduced.

The new policy on disposal of property states that its purpose is, in part, “to provide a procedure that will be open to public scrutiny except in those cases where public disclosure of information relating to the disposition of the property would prejudice the competition or bargaining position of the City.”

It adds that the procedure is intended “to provide for public notification of any sale in all cases where premature disclosure of information is not prejudicial to the City and to determine the appropriate method of disposing of the property in order to realize the best return on the sale.”